Temp Firms Turn Up the Heat on Hiring

Rafi Musher is part of the new breed ofstaffing firm executives.
As founder of Boston-based StaxResearch Inc., he’s watched his firm grow in five years - primarily byword-of-mouth. Through his network of friends at Harvard Business School inCambridge, Massachusetts, he’s capitalized on the ready-made pool of youngintellectuals pressured to pay back their college loans and furnish theirlow-rent apartments.

On the corporate side, he also knowsemployers are desperately seeking product managers, financial analysts, ITprofessionals and operations experts. His business venture, therefore, has beena match made in contingent heaven. “We have a way to bring starving talent tothose finding it tough to recruit them,” says Musher. Stax’s clients, headds, range from $40 million sporting-goods companies to billion-dollartechnology firms.

These professionals are in demand, butwith less time to find them, HR increasingly relies on contingent staffing firmsto deliver the talent needed ASAP. Today, there are approximately 7,000temporary staffing firms that have been in business for more than one year.Between them, they run more than 17,000 establishments throughout the nation,says Steve Berchem of the National Association of Temporary and StaffingServices (NATSS) in Alexandria, Virginia.

The good news is that despite the tightlabor market, third quarter 1998 temporary-help revenues and employment were up,according to the NATSS quarterly survey of industry performance. In fact,revenues increased to $15 billion, up 16.3 percent from the third quarter of1997. Meanwhile, employment grew to an average 2.9 million temporary employeesper day in the third quarter of 1998, 9 percent more than in the same period in1997.

“Job opportunities with staffingfirms abound in nearly every area,” says Richard A. Wahlquist, NATSS executivevice president in Alexandria, Virginia. Also, the Employment Outlook Survey,conducted quarterly by Milwaukee-based Manpower Inc., projected nationwidehiring prospects to remain essentially unchanged this opening quarter, whenadjusted for seasonal variation, from the same quarter a year ago and the finalquarter of 1998. Demand is particularly strong for accountants, financialanalysts, commodity managers and information technology specialists.

Given the temporary staffingindustry’s fierce competition, HR can be more selective. Contingent staffingfirms have been forced to recruit more creatively, focus on neglected targetgroups and provide more standard benefits, including training.

All of these efforts - topped withaggressive marketing campaigns - clearly work in your favor by increasingconfidence in your vendors, guaranteeing greater diversity and lowering employeebenefits and training costs. So reassess your current partnerships. Benchmarkthem against those successfully responding to the tight labor shortage.

Creativity sparks recruitmentstrategies Today’s labor market certainly is adouble-edged sword for temporary staffing services, says Berchem. On one hand,overworked HR professionals are turning more and more to staffing firms.Approximately 90 percent of companies surveyed by NATSS say they increasinglyrely on temp firms to help fill job vacancies. On the other hand, a 4.3 percentunemployment rate doesn’t leave employers with a big pool of qualifiedapplicants. “We’re all trying different things,” he says. “Our agenciestell us that recruitment is their number one problem.”

That’s why Burt Slatas, director ofmarketing services at Olsten Staffing Services believes that creativity is animportant component of one’s strategy. It’s not just a matter of definingwho you’re trying to recruit that’s important, but how you intend to reachthem.

For example, the Melville, NewYork-based agency has placed advertisements not only on the Internet, but onpizza boxes, place mats in food diners and cafeterias. Some recruiters evenattend PTA meetings to entice the unemployed or dissatisfied parentprofessional.

And imagine a busload of urbancommuters, startled by the outburst of an Olsten recruiter, who performs his orher schtick before the next bus stop? After getting the commuters’ attention,the recruiter then hands out Olsten calling cards to facilitate the follow-up.In addition, Olsten’s recruiters have handed out dummy checks on collegecampuses, announcing the types of benefits accrued by those who sign up with thefirm. With such aggressive marketing strategies, Olsten recruiters have becomemore visible to the unemployed.

You don’t have to make a scene toreach the right market But one needn’t always be in yourface, so to speak. There are subtle and convenient methods of reaching the sameaudience. Adecco Job Shop is one example.

Last year, Adecco supplied more than65,000 U.S. businesses with qualified personnel in a market that had record lowunemployment. Job Shop is a first-of-its-kind interactive kiosk that reaches thepublic by using touch-screen technology to link job seekers with Adecco’snetwork of employment opportunities.

Since last May, Adecco operates 65 JobShop kiosks in 22 states, but the firm’s goal is to have kiosks in 33 statesby this spring. At the end of December last year, 659,600 people “touched”the Job Shop kiosks, producing 29,000 qualified applicants and placing 12,100candidates, says Linda Tucker, national manager.

And that’s just in the United States.Globally, Job Shop is located in 80 locations throughout Europe with plans toopen in Australia with the Adecco/Olympics 2000 contract. “Whoever gets therecruit leads this market. It’s definitely an employee-driven market,” shesays.

In one example, she recalls, an HRmanager from Wells Fargo Bank - an existing Adecco client - was walking in themall when she stumbled upon a Job Shop kiosk. In need of employees to work atretail banking stations (such as those found at grocery stores), she keyed inthe locations, the job descriptions and other pertinent data. Within moments,the information was connected to Adecco’s microsite on Monster.com, whereupona list of possible recruits was identified for the bank.

Adecco’s microsite with Monster.com,Tucker says, is called WorkFlex. It’s a new agreement between the temp firmand the Web-driven career development specialists. Basically, all the jobprofiles in a Job Shop kiosk are automatically downloaded onto the WorkFlex site- thereby allowing Monster.com visitors immediate and direct access toAdecco’s job openings. One also can chat and hyperlink to other Web sites fromWorkFlex. “We’re taking advantage of those more highly skilled on theWeb.”

However, marketing one’s recruitingstrategy doesn’t overshadow the importance of defining who you’re trying toreach. Many temporary staffing firms, including Adecco and Olsten, aresuccessfully reaching out to previously underrepresented groups of potentialrecruits.

Staffing firms targetunderrepresented groups Given today’s tight labor market,many temporary staffing firms are casting their nets far and wide. Says Susan V.Breen, CEO of GFI Professional Staffing Services in Keene, New Hampshire:“Recruitment is extremely frustrating, so we’ve been working very hard onretaining longer-term employees who prefer flexible work styles.”

GFI’s target segment, she says, hasbecome broader. The cultural shift toward flexibility has given the temporarystaffing industry a more positive glow. Years ago, employers primarily soughttemps for clerical and administrative positions. Today, HR is seekingcontingents for all rungs of the corporate ladder.

Temp firms also are diversifying theworkforce by reaching out to seniors, minorities, welfare-to-work candidates,MBA moms - and the military. Both Adecco and Olsten, in particular, haveestablished special programs to target the latter because of the informationtechnology shortage.

Under Adecco’s Skills 2000 program,military personnel leaving the armed forces can turn to Adecco TAD (TechnicalAid Design) for their next step in civilian careers. Through a special agreementwith Redmond, Washington-based Microsoft Corp., transitioning service memberswill be able to be trained and recruited for jobs in the IT industry.

Similarly, Olsten Staffing Services andIMI Systems Inc. (the firm’s IT division) will provide job placement servicesto help former military personnel through the transition toward a second career.In addition, they’ll provide onsite and remote computer-based training, aswell as career guidance to assist service members and their families inlaunching and developing IT careers. More than 650,000 individuals come out ofthe military each year, so programs such as Skills 2000 is a promising way ofaddressing the IT shortage.

The key to recruiting and retainingthis sector, Slatas says, is by continuing to upgrade their skill levels.Indeed, as HR professionals increasingly rely on temporary services forpersonnel, they’re also relying on these firms to provide more benefits and toassume more training responsibilities - thus relieving employers of such costs.

Rely on vendors who provide benefitsand training At a time when companies are stilldownsizing and have less available resources, temp firms that provide benefitsand training will be more competitive. Once candidates are hired, what’s toprevent them from turning down the next best offer? “In order to retainpeople, we have to stretch and provide them with what’s important to them,[such as] benefits and training” says Slatas.

Olsten and other temporary staffingfirms continue to provide and upgrade their employee benefits, such as medical,holiday and vacation pay. Some have even offered retirement plans. “It’svery critical,” says Slatas. Whereas in the past, contingents weren’t givenstandard benefits, it’s becoming more of the norm in the staffing servicesindustry today. In addition to substantive wages and benefits, contingents alsoare looking for firms that provide free employee training.

Therefore, many firms are meeting thatdemand as well. In fact, NATSS reported that staffing companies are spendingmore than ever to enhance the skills of their temporary workers. In 1997, theindustry spent an estimated $866 million training temporary employees, two and ahalf times more than the $335 million spent in 1995.

Ninety percent of staffing companiesprovided training at no cost to their temporary employees, according to NATSS’quarterly survey. In 1997, an estimated 4.8 million temporary workers receivedspecific training in a wide variety of career-building skills. While much of theinstruction occurred in training centers, classrooms or personal tutorials, themajority of companies also supplied computer tutorials.

To keep their temp employees working,many staffing firms also have employment counselors to provide career pathingfor their contingents. Slatas says Olsten recruiters thus find it easier to“bottom-fill” - that is, to find people with lower-level skills and thenupgrade them to higher positions. As employers hire these temporary workers,they’re able to observe their performance and see how they’d fit in with thecorporate culture long-term.

Such mutual arrangements haveapparently been very successful. According to industry experts, approximatelyone-third of all contingent jobs have moved from temp-to-hire, which is apositive trend for employers seeking a stable workforce.

So remember, those in the temporarystaffing services industry are scrambling to become your vendor of choice. Asyou reassess the ones you have, HR might even consider the notion of vendorconsolidation. In other words, instead of getting your contingents from severaltemporary staffing services, you may want to consider working with only one; theadvantage being that the arrangement would simplify recordkeeping, relationshipbuilding, communication and negotiating rates.

After all, when it comes to contractingwith a temporary staffing agency, what you’re looking for is a reliablepartner. One that views itself as working alongside HR, respects yourcompany’s culture and understands your business goals and needs. So ratherthan worrying about today’s tight labor market, transfer the heat onto yourstaffing services vendors. Let them find temps-to-go.